How do you see your employees: As a necessary evil or as your greatest asset?

By Shaun Duvall, Puentes/Bridges

How do you see your employees: As a necessary evil or as your greatest asset?

Your answer to this question may be important to help understand why your farm works as it does. In this month’s column, I give you my observations as food for thought. You may agree or disagree, but I think these thoughts are important to consider.

After being in the workforce for some 40 years in many capacities, I have observed that there are two basic paradigms of employment.

The first is very traditional in the world today. It is also an old paradigm, having been around almost forever. The employee is a necessary tool to achieve production. He or she is expendable and, at any infraction, can be fired and replaced. There is no real relationship, and therefore, little trust on either side. The employer has the power and the employee either does what the employer wants, or is released or disciplined.

Out of this mindset came the union movement. This movement achieved much in the way of help and protection for workers. However, it does have its drawbacks. One I have observed is that unions tend to protect mediocrity, or those who shouldn’t really be in that job. The motives are noble, but the effect is sometimes contrary to their original intent.

Because of the confrontational nature of this type of employing, there is little trust on either side. The employees’ motives are to do the least possible work for the most possible pay. The employers’ motives are the opposite: Get the most possible work for the least money. It is hard to find understanding and cooperation for the good of all in such a set-up.

The other paradigm is also old. It has had a history in small family businesses and farms for centuries, and in many countries. It also has been gaining popularity on many of the dairy farms where I work. The idea here is that employees are an asset. Without them, your business wouldn’t run. Just like a retailer does everything he or she can to court customers (customers also being an asset), the employer does whatever he or she can to help the employees do their best job. They try to help the employee realize his or her potential and take away the greatest fear of the employee: to be fired.

Trust is established in this kind of paradigm -- the employer toward the employee and vice versa. The employer knows that because he or she won’t be firing anyone, the employee feels more loyalty and commitment, therefore becoming a better employee.

I always move in baby steps. Try this for now. I wonder how your farm might change if once a day, every day, you let your employees know in many different and creative ways how essential they are to your success. Not always a bonus but, rather, a thank you, a meal together, a phone card, any number of things to let them know they are valued and important. Let me know how this works for you! Next month: examples.

Tips on managing the cost of workers’ compensation claims and limiting their manipulation and misuse.

By Anthony P. Raimondo, attorney

One of the most frequent problems that plague dairy producers is the abuse of workers’ compensation. Many states, especially California, provide compensation systems for workplace injuries that are very generous to employees and can be difficult for employers.

In California, the employer’s insurance premium is regulated by law. While base premiums are standardized, the primary factor that can drive up premium costs is the "experience modification rating" (commonly referred to as the "ex-mod"). Like car insurance, the number of claims and the cost of those claims lead to increased premium costs, which increases overhead costs and eats into profit margins.

Dairy producers are often frustrated at the functioning of workers’ compensation systems. In states like California, these systems are heavily biased in the employee’s favor, and enterprising employees and knowledgeable attorneys can drag out the process, with every dollar spent ultimately costing the producer in the form of increased premiums. Fortunately, there are things that can be done to manage the cost of workers’ compensation claims and limit the abuse.

Know Your Adjuster: When an employee files a workers’ compensation claim, the dairy must make contact with the adjuster as quickly as possible in order to understand how the carrier intends to handle the claim. Don’t be afraid to ask questions, and be sure to share information that you know about the employee. If the employee is working "on the side" while supposedly injured, the carrier can have an investigator film him or her in action to undermine the claim. If an employer wants the carrier to handle the claim aggressively, he needs to be a bug in the adjuster’s ear. Employers cannot expect an insurance adjuster handling hundreds of claims to be aggressive with the claim unless they are invested in the process.

Use Light-Duty Work: Light-duty work is an important part of controlling claim costs. In California, employers are not required to offer light-duty work, and dairy producers are often reluctant to do so because they don’t want the injured employee back until the worker is healed. This can be a mistake.

Properly designed light-duty work can control claim costs (and the impact on premium) and create an incentive to return to work. Light duty reduces claim costs because the employee remains working and does not collect temporary disability benefits paid by the carrier. Light duty can encourage a return to work because a properly designed light-duty position will make the employee want to go back to the regular job.

The best light-duty jobs are physically easy, to accommodate work restrictions, but boring and isolated from other workers. While employers must avoid assignments that are so unpleasant as to be punitive, a boring task that the worker does without anyone to talk to may encourage a quick recovery. Every dairy has little chores that fit this requirement, like cleaning manure off of rails, painting fences, inventorying parts and equipment and other similar tasks. In contrast, if the employee can sit at home doing nothing and get a check from the insurance carrier, there is very little incentive to return to regular work.

Light-duty assignments should be provided in writing with an explanation of the work and a clear statement that the assignment is temporary. If necessary, the description can be sent to the employee’s doctor for confirmation that the employee can handle the work.

Document and Enforce Disciplinary Standards: It is not uncommon for employees who are performing poorly to suddenly suffer disabling injuries when they feel that they are closing in on termination. It is important to have an employee handbook that sets forth rules and performance expectations, and to document employee performance problems consistently. While employers cannot discriminate against workers who suffer industrial injuries, an industrial injury does not insulate the employee from discipline for performance problems.

A history of documenting performance problems with all employees will enable the dairy to show that the injured worker was treated no differently than uninjured workers with similar performance problems by showing that the rules are enforced consistently. Also, documenting performance problems will clearly show that the employee’s problems started long before the injury. Finally, clearly stated safety rules that are enforced through discipline can often help support the employer in controlling the benefits paid when an employee causes his or her own injury through a safety violation.

While some employees will always search for a way to manipulate the system in their favor, employers can give themselves an advantage in preventing workers’ compensation abuse by having written policies, a strong practice of documenting performance problems and disciplinary issues, and by being actively engaged in the handling of claims. If a dairy producer simply lets the process happen, abuse and increased premium costs are a virtual inevitability. As with all aspects of the business, active management is the key to better results.

The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at McCormick Barstow LLP in Fresno, at (559)433-1300.

I recently ran into a situation that I hope is unusual, but very troubling, that made me think about total systems a little differently.

A dairy operator called with a question about heifer-raising contracts and what kinds of protocols may be specified in those contracts. The call was prompted because they had been put on the FDA drug residue watch list due to a market heifer’s positive test for illegal residues in the carcass. This is a serious issue for any dairy, but even more so for a large dairy.

The heifer had been on the heifer raiser’s farm for some time and apparently had health issues the custom operator had been treating. The decision was made to no longer deal with the heifer but to market it. Unfortunately, somewhere in the process, the heifer had received a drug that was not properly labeled for dairy or had been improperly administered, so when it went to harvest, the drug residue was found in the carcass. Because the heifer was marketed in the animal owner’s name, they technically became the violator, even though the animal had not been under their care and control at the time of the drug administration.

One result of this incident is that the dairy will be under extra scrutiny for future cow marketing. There will be extra visits with a veterinarian regarding drug handling and administration, and more attention to the records being kept. On the main dairy milking unit, this will be inconvenient, but the farm already has excellent protocols, controls and systems in place, so risks there are minimal.

There is great concern, though, for future marketing of heifers from the custom operator. If one heifer left the farm with illegal residues, how many other heifers may have been similarly treated because the withdrawal for this product is quite long. What if more of those heifers need to be marketed, or what are the potential impacts if a treated heifer is brought home to the milking herd?

Back to the original phone call – what can the owner do to prevent this kind of incident from being repeated? Most heifer growers probably have a standard contract they use, but there is nothing preventing the animals’ owner from asking for more. In this case, we suggested an addendum that specifies allowable treatments for heifers from this farm. If there are any health situations that cannot be handled with those treatments, the owner’s veterinarian should be consulted to be sure all treatment protocols are consistent with those on the dairy.

The heifer grower will be asked to keep and provide detailed treatment records for all animals from this dairy so the dairy has accurate (hopefully!) information for making decisions on marketing and managing their heifers.

While this situation was compounded by heifers being on a different farm, under different daily management, the same thing could potentially happen with your heifers right at home if you aren’t careful.

Your first step is to maintain a full veterinary-client-patient relationship (VCPR). Consult your veterinarian regularly on health management and be sure to follow all instructions carefully. Sometimes farms, in an effort to save money, shortcut that relationship by treating animals with are over the counter (OTC) products that may not be the proper or best treatment for the problem. We also occasionally hear of prescriptions being requested without a vet seeing the animal. These can be among those situations leading to residues.

Your vet is trained to recognize diseases, know the proper treatments and advise on withdrawal periods when drugs do need to be used. The vet is also able to advise you on proper treatment amounts to safely be administered. Overdosing the proper product can also result in residues, so proper rates are essential.

Be sure to administer all products properly. I recently read of a case where a product labeled for subcutaneous injection ended up being inadvertently injected into muscle tissue because an animal was inadequately restrained. The animal tested positive for drug residue even though a proper product and amount had been used.

The other essential step is accurate and complete record keeping. Safe food production demands accurate handling of all pharmaceuticals. Read all labels and follow directions exactly. The formulation of a product might have changed from the last time you used it, so the amount to administer may have changed as well. Carefully mark any treated animals and keep handy records of treatments to avoid marketing meat or milk from any treated animal before its safe time. Be sure everyone on the farm understands the marking system.

You are producers of quality meat and milk. You are also the first line of defense in making sure those products are safe. Don’t shirk your responsibility.

The Labor Day holiday is a time for rest and reflection, so after some rest, let us reflect on the current state of rural labor and immigration reform. “Ugh,” you say. “Let me enjoy my barbecue and drink in peace as the last days of summer pass.” While I would be happy to oblige, many of your congressional representatives have no intention of doing so, and they are planning to rekindle the immigration debate when they return from the holiday.

If the debate were over AgJOBS or some other common-sense solution for agriculture, then you would have reason for optimism. But the political battle for victory in 2012 has begun in earnest, so the silly season is upon us. Right on cue, Congressman Lamar Smith plans to push the Legal Workforce Act, the central component of which is mandatory E-Verify for all employers in the U.S.

E-Verify is the federal electronic system to verify employment authorization. It is presently voluntary under federal law. There are also nine states that have mandatory E-Verify, with Arizona being the most notable. The U.S. Supreme Court in Chamber of Commerce v. Whiting recently ruled this Arizona law constitutional. Mr. Smith’s bill was introduced shortly after the Court’s decision. The bill explicitly incorporates Whiting by continuing to allow states to use their business licensing powers to mandate E-Verify.

Why has it taken so long for Mr. Smith’s bill to be introduced? My sources on Capitol Hill tell me that the initial introduction of the bill resulted in an extremely negative reaction from the agriculture industry. In an attempt to mollify this criticism, Mr. Smith has now added a three-year period before E-Verify would apply to agriculture. Negotiations are also underway among congressional Republicans to streamline the H-2A visa to allow for a more robust temporary worker program. Mr. Smith claims that this will allow farmers to gradually replace their undocumented work force with a legal one over the three-year period. Of course, as with any legislation, the devil is in the details, and the public has not yet seen the modified version of the bill.

Will the revised version be good or bad for dairy? There are reasons for concern given the concepts being discussed. Mr. Smith and his allies clearly believe that the workers that agriculture needs will simply appear once the demand for undocumented labor is eliminated. They argue that wages for farm workers will rise and native-born workers will flock to the jobs. This is an oversimplification of the causes of the rural labor crisis, and dairy producers should be wary of a solution that is based on such a flawed premise.

The H-2A modification to the bill also has several potential flaws. First, there is a very serious concern among farm worker advocates that the bill will completely gut worker protection measures in the name of efficiency. While agriculture is desperate for a solution, it should not forget the lessons of the failed Bracero guest worker program.

Second, when the three-year phase-in is coupled with an H-2A visa, one stark reality remains: Dairy producers will eventually lose the well-trained workforce that they presently employ. Because the vast majority of those workers have been in the U.S. unlawfully for more than a year, they will not be eligible for re-entry under the H-2A visa for a minimum of 10 years, and in many cases, permanently.

Finally, the H-2A visa is only for seasonal workers. For this reason, dairy producers have never been eligible to use it because cows have to be milked 365 days a year. It remains to be seen whether the bill will allow dairy to use the H-2A visa to employ foreign workers year-round. At least one of my sources with knowledge of the negotiations was extremely skeptical that the bill would result in an H-2A visa that would be useful to dairy.

It is clear that the agricultural industry has already had an impact on the shape of this bill, but dairy producers need to remain extremely vigilant. When a draft is finally released, these and other tough questions need to be asked. Whether the bill is good for dairy will depend on the answers.

Erich C. Straub is an immigration lawyer who practices in Wisconsin and is listed in The Best Lawyers in America, SuperLawyers, and U.S. News and World Report’s Best Law Firms. Mr. Straub has spoken to audiences throughout the U.S. on immigration, and frequently advises Wisconsin Dairy Farmers on the topic. He has traveled Washington DC to meet with elected officials regarding immigration reform, and in 2008, the Milwaukee Business Journal described him as a “national leader on the federal immigration issue.”